Contestants have what they perceive to be a viable and potentially profitable business idea but lack funding, or are already trading in their business but need additional funds for promotion or expansion. In the show, the contestants have an opportunity to present their business ideas to five wealthy entrepreneurial businesspeople, the "Dragons" of the show's title. They are required as part of their opening pitch to specify the amount of money they require from the Dragons. The rules stipulate that if they do not raise at least this amount from one or more Dragons, they must leave with nothing. In exchange for the investment, the contestants offer equity in their business, the percentage of which is also stipulated at the beginning of the pitch. If the Dragons see potential in the business idea or product, negotiations then take place around the amount of equity on offer, with the contestant having the opportunity to negotiate further, accept any offers, or simply walk away. Dragons can also offer a percentage of the money requested if they do not wish to commit the full amount, leaving the other Dragons free to do the same. This can lead to the contestant receiving the financial backing of more than one Dragon, with the benefit of a broader range of expertise. However, for this to occur, the contestant usually has to agree to relinquish a larger share in their business than they had first planned.
If, having heard the pitch the Dragons do not wish to invest, they must declare themselves "out", signalling that they no longer wish to be part of the discussion. On one occasion in series 4
Peter Jones continued to question an entrepreneur after he declared himself out. This conclusion can take a considerable amount of time to reach in the case of complex negotiations, or a few short minutes if the business being pitched is not perceived as credible. Dragons do not take kindly to company over-valuations, and contestants can often be the subject of ridicule for this and just about anything else whilst in the Den.
